SEX.COM, INCORPORATED v. DOMAIN NAME ACQUISITION GROUP, LLC et al Doc.

1
Case 2:05-cv-05111-BWK Document 1 Filed 09/26/2005 Page 1 of 9

IN THE UNITED STATES DISTRICT COURT

FOR THE EASTERN DISTRICT OF PENNSYLVANIA

SEX.COM, INCORPORATED :
:
v. :
: CIVIL ACTION
DOMAIN NAME ACQUISITION :
GROUP, LLC : NO.
:
And : JURY TRIAL DEMANDED
:
ANDREW MILLER :

And

PETER HUBSHMAN

And

DEAL JAM, LLC

COMPLAINT

1. Plaintiff, Sex. Com, Incorporated, is a Delaware corporation, with an

address of 203 NE Front Street, Suite 101, Milford, Kent County, Delaware, 19963.

2. Defendant, Domain Name Acquisition Group, LLC (hereinafter “DNAG”)

is a corporation with its principle place of business located at 123 Newbury Street,

Second Floor, Boston, MA 02116.

3. Defendant, Deal Jam, LLC (hereinafter “Deal Jam”) is a corporation with

its principle place of business located at 123 Newbury Street, Second Floor, Boston, MA

02116.

Dockets.Justia.com
 Case 2:05-cv-05111-BWK Document 1 Filed 09/26/2005 Page 2 of 9

4. It is alleged and therefore believed, Defendants DNAG and Deal Jam are

corporations that acquire options to purchase and/or purchase domain names and

thereafter sell same to others.

5. It is alleged and believed, Defendants, Andrew Miller and Peter

Hubshman, are owners and principles in both Defendant DNAG and Deal Jam, with a

principle place of business located at 123 Newbury Street, Second Floor, Boston, MA

02116.

6. At all times relevant hereto Defendant DNAG and Deal Jam acted and/or

failed to act by and through its authorized agents, servants and employees.

7. Jurisdiction in the Eastern District of Pennsylvania is based upon 28

U.S.C. §1332 as the amount in controversy, exclusive of interest and costs, exceeds

$75,000.00 and the parties are citizens of different states.

FACTUAL BACKGROUND

8. On August 12, 2005, Plaintiff’s authorized agents and Defendants signed a

URL Purchase and Sale Assignment Deposit Agreement. A true and correct copy of the

URL Purchase and Sale Assignment Deposit Agreement (hereinafter referred to as

“Agreement”) is attached hereto, made a part hereof, and marked as Exhibit “A”. The

Agreement was solely drafted by Defendants and/or its Attorneys.

9. The Agreement drafted solely by Defendants and/or its Attorneys centered

around the purchase of the domain name “Sex.Com” as well as a future Consulting

Agreement to be negotiated between the parties.

 Case 2:05-cv-05111-BWK Document 1 Filed 09/26/2005 Page 3 of 9

10. The agreement drafted solely by Defendants and/or its Attorneys stated

the parties intended to complete documentation and fully fund the transactions no later

than Tuesday, August 16, 2005 at 5 pm.

11. The Defendants, who solely drafted the Agreement, made “time of the

essence” for completing the contracts and closing documents and closing any deal.

Despite this fact, Defendants did not present Plaintiff’s Agents with a copy of proposed

contracts and closing documents until August 15, 2005, at about 3:00pm.

12. The Agreement solely drafted by Defendants and/or its Attorneys required

Plaintiff to tender a deposit of $500,000.00 directly to Defendants to be applied to any

acquisition and assignment of the Sex.Com domain name.

13. Plaintiff immediately tendered said deposit of $500,000.00 to Defendants.

14. The Agreement stated the $500,000.00 deposit was to be refundable if

Defendants are unwilling or unable to complete the transaction.

15. After Plaintiff received a copy of the proposed contracts and closing

documents, again drafted solely by Defendants and/or its Attorney, on August 15, 2005,

at a time about 3:00pm, Plaintiff requested its Counsel, Robert M. Silverman, Esquire,

review same and make suggested changes for Plaintiff’s protection.

 Case 2:05-cv-05111-BWK Document 1 Filed 09/26/2005 Page 4 of 9

16. The first change suggested by Plaintiff’s Counsel was that he and his firm

act as escrow agent, given the significant purchase price and because Plaintiff had never

done business with Defendants. Plaintiff’s Counsel communicated the need to change the

Escrow Agent for his client’s protection to both the Defendants’ agents and defendants’

Counsel and stated once Defendants agree to the change, they could move on to other

necessary changes to the documents and contracts. Both Defendants and its Counsel

absolutely refused to make the change in Escrow Agent and thereby became unwilling

and unable to finalize the intended domain name purchase and future consulting

agreement.

17. Prior to August 16, 2005 at 5:00pm, Counsel for Plaintiff again made his

request for a change in Escrow Agent and just as importantly, that defendants waive the

“time of the essence” clause in the Agreement. Neither Counsel for Plaintiff nor Plaintiff

received a response to said request prior to 5:00pm on August 16, 2005. Again, when

Defendants refused to extend the “time of the essence” closing, they became unwilling to

conclude the intended transactions.

18. After the Agreement expired on August 16, 2005 at 5:00pm, Plaintiff’s

Counsel received a letter from Defendants’ Counsel again reaffirming its refusal to

appoint Mr. Silverman to act as Escrow Agent.

19. Despite repeated demands by Counsel for Plaintiff, Defendants refuse to

refund Plaintiff’s deposit of $500,000.00.

 Case 2:05-cv-05111-BWK Document 1 Filed 09/26/2005 Page 5 of 9

COUNT I 
BREACH OF CONTRACT 

20. Plaintiff hereby incorporates all facts and allegations set forth in this

Complaint by reference as if fully set forth at length herein.

21. Plaintiff and Defendant signed the URL Purchase and Sale Assignment

Deposit Agreement, attached as Exhibit “A.”

22. The Agreement drafted solely by Defendants and/or its Counsel states

time is of the essence and if Defendants are unwilling or unable to complete the Domain

Name and Consulting Agreement transactions, a refund of the deposit must be made .

23. Plaintiff tendered $500,000.00 as a deposit according to the terms of the

Agreement.

24. Despite reasonable attempts to negotiate, the parties were unable to

complete the transaction because Defendants were unable and unwilling to proceed with

the transactions.

25. Despite Plaintiff’s repeated demands for a refund, the deposit of

$500,000.00 has not been returned.

26. Defendants’ intentional refusal to refund the deposit is a breach of the

Agreement between the parties and a breach of all obligations Defendants incurred upon

entering into said Agreement.

WHEREFORE, Plaintiff respectfully demands judgment against Defendants in

the amount of $500,000.00, together with interest thereon.

 Case 2:05-cv-05111-BWK Document 1 Filed 09/26/2005 Page 6 of 9

COUNT II
WRONGFUL CONVERSION

27. Plaintiff hereby incorporates all facts and allegations set forth in this

Complaint by reference as if fully set forth at length herein.

28. Plaintiff avers Defendants gained possession of the $500,000.000 deposit

by theft, trick, misappropriation and under false pretenses, without entitlement or

justification.

29. Defendants engaged in conduct alleged in the above paragraphs intending

to interfere with Plaintiff’s ability to enter into a contract for sale.

30. After Defendants became unwilling to perform, Defendants had no claim

to Plaintiff’s deposit, but acted otherwise.

31. At no time did Defendants act in good faith.

32. Defendants drafted and signed the Agreement knowing the $500,000.00

deposit paid by Plaintiff was refundable if Defendants became unwilling or unable to

complete the transactions.

33. Plaintiff fully complied with the terms of the Agreement and at all

material times was ready, willing and able to conclude the intended transactions. In

furtherance of closing the transactions, agents of Plaintiff formed a separate corporation

and deposited necessary funds in a separate bank account titled “Sex.com, Inc.”

34. Due to Defendants’ unwillingness to complete the transactions, Plaintiff

was entitled to a refund of the deposit.

35. Defendants refused to return Plaintiff’s deposit.

 Case 2:05-cv-05111-BWK Document 1 Filed 09/26/2005 Page 7 of 9

36. Defendants have no claim for the possession of said deposit, under any

lawful circumstances.

37. Defendants, through their scheme to defraud and extort funds from

Plaintiff, obtained possession of Plaintiff’s funds by theft and trick, and converted it for

Defendants’ use, including Defendant, Andrew Miller and Peter Hubshman’s personal

use.

38. Plaintiff has suffered damages as a result of Defendants’ unlawful

conversion of her $500,000.00 deposit.

39. Defendants’ conduct has deprived Plaintiff use, possession and enjoyment

of its property/funds.

WHEREFORE, Plaintiff respectfully demands judgment against Defendants in

the amount of $500,000.00, together with interest thereon.

Case 2:05-cv-05111-BWK Document 1 Filed 09/26/2005 Page 8 of 9

COUNT III
FRAUD IN THE INDUCEMENT

40. Plaintiff hereby incorporates all facts and allegations set forth in this

Complaint by reference as if fully set forth at length herein.

41. Defendants, including Andrew Miller and Peter Hubshman, knowingly

and intentionally sought and coerced Plaintiff into signing the Agreement by way of

repeated untruths regarding the domain name Sex.Com, about other competing offers

for the domain name Sex. Com, and various other material and relevant exaggerations

and untruths.

42. Defendants, including Andrew Miller and Peter Hubshman, entered into

the Agreement with full knowledge that Plaintiff’s Agent’s signatures were obtained

by fraud and material misrepresentations.

43. Based upon said fraud in the inducement, the Agreement is null and void,

yet Defendants refuse to refund Plaintiff’s deposit.

WHEREFORE, Plaintiff respectfully demands judgment against

Defendant in the amount of $500,000.00 together with interest thereon.

KIMMEL & SILVERMAN, P.C.

By: ________________________________

ROBERT M. SILVERMAN, ESQUIRE

Attorney for Plaintiff
30 East Butler Pike
Ambler, Pennsylvania 19002
(215) 540-8888
Case 2:05-cv-05111-BWK Document 1 Filed 09/26/2005 Page 9 of 9